Safestay warns on liquidity and explores property sales as shares tumble

Hostel operator Safestay warned on Monday of liquidity pressure through the winter months as year-to-date trading fell below expectations, and said it is exploring additional property sales and a financing review, Reuters reports. Shares in the UK-based company, which runs hostels in countries including Spain, Belgium, Greece and Italy, fell 29.4% in early trading.

In its own trading update, Safestay said summer trading was weaker than management had anticipated. More recent trading has improved following revenue management initiatives implemented by its recently appointed chief operating officer, but year-to-date trading remains below the board’s original expectations. Cash flow is typically challenging during the fourth and first quarters, the company said.

The board is exploring further property disposals and a review of existing financing arrangements, the update said. Any proceeds would support working capital, maintain liquidity headroom and, where appropriate, fund investment in the hostel portfolio, though there is no certainty over the timing or outcome of any disposals or financing arrangements.

Safestay has already cut bank borrowings from £13.6 million at 30 June 2026 to £9.1 million at 23 October 2026, using a substantial proportion of the Glasgow sale proceeds along with a portion of the Holland Park proceeds, the update said. The group is also cutting costs, including relocating its head office to its Elephant & Castle hostel in November 2026 and reviewing head office and operational expenditure, while Brussels refurbishment nears completion and Lisbon works have commenced.

Sources: https://www.reuters.com/business/uk-hostel-operator-safestay-exploring-more-property-sales-boost-liquidity-shares-2026-10-26/ | https://uk.advfn.com/stock-market/london/safestay-SSTY/share-news/Safestay-PLC-Trading-Update/99552312